Vice President J.D. Vance’s last-minute decision to accompany his wife, U.S. Second Lady Usha Vance, on her controversial trip to Greenland has thrown Washington’s arctic strategy into sharp relief. The trip comes amid the president’s comments that the United States must “have” the island and Denmark’s prime minister accusing the U.S. of exerting “unacceptable pressure” on it.
Greenland, the world’s largest island, is a semi-autonomous territory owned by Denmark, with 80 percent of its land covered in thick ice and the remaining home to just 56,000 people, mostly of indigenous Inuit background. For many years, it has been a centerpiece in global geopolitics but now enjoys a renewed spotlight as the White House promises to make it part of the U.S., whether through purchase or annexation.
Western nations hope Greenland can provide a counterbalance to China, as it has the world’s largest reserves of rare earth minerals outside the PRC. China controls around 70 percent of production and 90 percent of processing, giving it a geopolitical “monopoly” on the entire value chain. Rare earth minerals are crucial in producing 21st-century technologies like batteries, electric vehicles and modern defense equipment. A 2023 survey found Greenland had 25 of the 34 critical raw materials as determined by the European Commission. Some expect Greenland’s total mineral resources to be north of $4.4 trillion in value, though only a fraction, around $186 billion, may be able to be extracted cost-effectively.
Greenland’s GDP is just $3.2 billion, with only a fraction of its minable reserves on its land and a highly volatile economy dependent upon the fishing industry. Greenland also depends on the Danish government’s generosity: roughly 20 percent of its economy is welfare. Denmark sends about $8,000 per Greenlander to the island and provides half of the Greenland government’s revenues, which in turn is used to employ roughly 40 percent of the island’s labor force. For now, if Greenland went independent—which is widely supported within the territory—it would need to replace this source of income. The White House has not commented on whether it is willing to pick up the tab.
Greenland’s leaders have shown an interest in investing in the country’s mining sector; however, they have been highly restrictive about allowing companies to enter the space. In 2021, Greenland Prime Minister Múte Bourup Egede banned extraction that could result in uranium exploitation exceeding 100 ppm (parts per thousand). While uranium exposure is a legitimate risk, numerous protocols protect workers and environmental health and safety; for every ton of rare earth minerals mined, about 2,000 tons of toxic waste are produced. Advanced mitigation strategies have been used for 40 years. The ban may be overturned as companies work to assure Greenland’s government that they can safely conduct the work. Greenland’s harsh conditions make it difficult to move heavy materials, fly helicopters or house workers near a site.
While owning Greenland would give the U.S. complete control over the island’s policy, it can still leverage its economy and capital to incentivize the country to have a more business-friendly approach to mining. The Biden administration, the European Union and China have all tried to vie for influence on Greenland. Joe Biden’s White House often pushed the Danish territory to allow more mining investment and expand the presence of the U.S. military. At the same time, China has frequently tried to expand its business influence over the island, which the U.S. and EU have attempted to curtail.
Getting exclusive access to rare earths in Greenland or elsewhere (the U.S. is also looking to strike deals with Ukraine and the Democratic Republic of Congo) may not solve the White House’s problems. While the United States is the second-largest producer of rare earth minerals, still just 12 percent of the world’s supply, it exports two-thirds of its rare earths to China for processing and refining. China’s state-of-the-art refineries can turn ore into final products (like magnets) exported back to the U.S.—a capability American producers lack. Ultimately, the U.S. winning the rights to mine in Greenland may only be another victory for China.
